The Mexican government announced it will be the majority financer of a credit agreement of US$388 million to bail out bankrupt operator Altan Redes, a move to maintain competition in the Mexican telecoms sector against dominant player America Movil.
In a translated statement, Alta Redes detailed the financing structure of the bailout involves the Mexican development bank which granted a loan of US$161 million, with the remaining cash coming from suppliers (US$166.6m), shareholders (US$50.5m) and clients (US$10m).
The bailout is to support the government’s shared network plan Red Compartida, a scheme announced by the government in 2016 to overhaul the telecommunications industry in Mexico by constructing a shared telecommunications network.
The cash injection also ensures Altan Redes will continue its operations and services to 79 million customers in Mexico
Mexican president Andrés Manuel López Obrador said in a news conference: "The Mexican state is already the majority partner, it has the direction and the administration of the company."
Lopez Obrador added that the bailout will secure Internet access in all towns and free WiFi in public squares, schools and hospitals, reported Reuters.
Altan Redes filed for bankruptcy protection in 2021 due to mounting debts.